Category: Archive

North-South pipeline: U.S. company wants competition

February 16, 2011

By Staff Reporter

By Harry Keaney

If Ireland does not allow competitive pricing for gas, which would result in different prices for consumers even within the country, then Keyspan, a leading U.S. gas company, will not be involved in a proposed new North-South pipeline, a spokesman for Keyspan has told the Echo.

Last week, Ireland’s Labor Party spokesman on public enterprise, Emmet Stagg, a member of the Dáil, issued a statement urging Minister Mary O’Rourke to "resist attempts by multinational companies to undermine the uniform pricing of gas to Irish customers."

But Bob Mahony, spokesman for Keyspan, said that when Keyspan officials met with Taoiseach Bertie Ahern a year ago, it was "our understanding that Ireland would be open to competition."

Stagg said that two multinational companies, British Gas and Keyspan, are currently promoting a North-South gas pipeline in Ireland. According to Stagg, the Irish government intends applying a public service levy on this pipeline to ensure that gas is provided at the same cost to Irish consumers, regardless of their location.

This principle of universal pricing is a cornerstone of Irish energy policy and is critical to regional development, Stagg said.

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But, he added, "the promoters of the new pipeline are resisting this levy at every hands turn and have now threatened to take the issue to the European courts.

Referring to O’Rourke, Stagg said that "the minister should not bow to this pressure under any circumstances."

He added that if British Gas and Keyspan were to succeed, they would, in effect, introduce a discriminatory price regime for the transmission of gas.

But, said Stagg: "Cherry-picking of profitable sections of the market would take place with the effect that, for example, gas consumers in Limerick or Cork would pay significantly more for their supplies than consumers in Dublin. Such a policy would totally undermine our regional development of the country."

Keyspan, however does not agree with this. "If the government of Ireland does not want to introduce competitive pipelines — and Keyspan wishes Ireland the best — we will not be building a pipeline without competition," Mahony said.

And he added that Keyspan has "never threatened to take this issue to the European courts and we have no intention of doing that."

As to having different prices within Ireland, Mahony insisted that Ireland and its consumers "will benefit from competitive pricing." And he added that "proof of that is in the U.S. itself."

Mahony said the North-South pipeline would be a first step in bringing gas throughout Ireland and it would compete with other pipelines in Ireland.

Mahony agreed that prices would vary depending on how much gas is used. "Competitive prices will vary within the country depending on what the costs are and use," he said. But he added, the "common denominator is that it will be the best price Keyspan can give."

As an example of this, he said that up until 1990, all of the gas to the North Eastern United States was coming from the Gulf of Mexico, and the Texas-Louisiana area. In 1990, Keyspan, he said, led efforts to organize a consortium of utilities in the Northeast in bringing a supply of gas through a pipeline called Iroquois from Western Canada.

"This created competing prices," he said. "Now, 20 percent of our gas supply in the Northeast is from Canada. Now we are on the verge of bringing in another pipeline from the Atlantic Canada area."

Mahony pointed out that this competition will have considerable benefit for development in New York. "Three regions are competing for prices to the Northeast and this benefits the consumer."

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